(Radio Iowa) – August 28, 2014 By
Tyson Foods has agreed to some conditions to allow it to proceed with its $8.5 billion acquisition of the Hillshire Brands Company. Geoff Greenwood, a spokesman for Iowa’s Attorney General, says the conditions are part of a settlement proposed by the Justice Department and three states that filed suit to block the acquisition.
“The agreement that we have proposed allows Tyson to proceed with the acquisition of Hillshire — but Hillshire has to sell off Heinold Hog Markets, which operates a couple of facilities here in Iowa and also operates facilities in six other states across the midwest,” Greenwood explains. Hillshire’s Iowa facilities are in Sioux City and Story City.
Heinold buys sows from farmers, sorts the livestock at buying stations, and resells and trucks the sows to sausage processors, including Hillshire. Hillshire buys sows directly from farmers, which it then processes into sausage sold under the Jimmy Dean and Hillshire Farm brands. “Our concern was that one company would have too much of a role in the sale of sows, and that could affect prices for hog farmers,” Greenwood says. He says Tyson would have at least a third of the sow market through this acquisition.
Greenwood says the settlement needs final approval before things move ahead. “A federal judge has to take a look at it, and we hope the judge will sign off on that,” Greenwood says. “Assuming the judge does sign off on it, that clears the way for the sale of Heinold Hog Markets, and it clears the way for the consolidation of the companies.
Tyson Foods is a Delaware corporation and one of the world’s largest meat companies with its principal place of business in Springdale, Arkansas. The Hillshire Brands Company is a Maryland corporation with its principal place of business in Chicago, Illinois. Hillshire is a manufacturer and marketer of brand name food products for the retail and food service markets, including sausage, hot dogs, and lunch meats. Its brand names include Jimmy Dean, Ball Park and Hillshire Farm.